Keynote, Andreas Shierenbeck

Andreas Schierenbeck_drv © Siemens Switzerland Ltd 2009 December 2009

Andreas SchierenbeckAndreas SchierenbeckCEO, Siemens Building AutomationCEO, Siemens Building AutomationCopenhagen / December 14, 2009

Upping the Bottom Line: Upping the Bottom Line: A Business Perspective on Energy Efficiency for A Business Perspective on Energy Efficiency for BuildingsBuildings


Megatrends – the world's toughest questions

11 of the 12 years between 1994 and 2005 rank among the 12 warmest sinceweather observations began

Today we face the highest CO2 concentration in the atmosphere for the past350,000 years

Average life expectancy worldwide will increase to 72 years in 2025 from 46.6 years in 1950

World population will grow from more than 6 billion now to 8 billion by 2025

Today: 280 million people live in megacities (> 10 million residents) 2030: 60 % of the world’s population will live in cities

From 1950 to 2004, the volume of global trade has increased 27.5-fold.

The number of global players has grown from 17,000 in 1980 to over 70,000 today

Climate

Change

Demographic

Change

Urbanization

Globalization


What we know about cities…

Cities cover less than 1% of the earth's surface but are disproportionately responsible for causing climate change

Currently, around 50% of the world’s population live in cities. Until 2030, 60% of the world's population growth will occur in cities

Cities consume some 75% of the world's energy and are responsible for up to 75% of greenhouse gas emissions and account for 60% of world's water use

Megatrends pose urgent challenges to cities

Osaka at night

Andreas Schierenbeck_drv © Siemens Switzerland Ltd 2009

Different types of cities have different challenges

Developed cities Megacities Planned future cities

Quality of life

Attractive for companiesand industry

Industrial and urban growth

Build-up of infrastructure

Industrial and urban growth

Build-up of infrastructure

Sustainability (emission,energy efficiency)

Infrastructure renewal

Pollution, congestionprovision of resources(water, electricity, swage treatment)

Limiting resources (particularly energy and water)

Moderate transition Reckless growth Forward looking


What we know about buildings…

40% life cycle cost of a building is consumed in energy

80%

Operation / Renovation

Life cycle Investment

1–2 502–5

20%

Design Build

Transport28%

Industry31%

Buildings41%

(direct emissions from primary energy

usage)

(indirect emissions through power usage)

2211

138

1418

14

Forestry 14Agriculture / wast 18Transport 14

Industry (direct emissions from primary energy usage)

Industry (indirect emissions through power usage)

Buildings

Demolition

0–1

Operation cost 60%

Energy cost 40%


Innovative technology andintelligent usage can save significant energy

Bild von Volker Dragon

Energy consumption (heating, cooling, ventilation, hot water …)

On-site energy generation (Solar, wind, Geo-thermal …)

Efficiency in the building (Lighting, Air-quality …)

Saving 20% - 40% energy are realistic!EU: 2018 net zero energy buildings. US (CAL) 2020-2030


Buildings generate most of CO2 emission in developed cities

Mix of CO2 Emissions (Total 47 Mt 2005)

Buildings

TransportIndustry

67 %26 %

7 %

Example London


CO2 emission reduction is financially profitable

Potential for CO2 reduction in London till 2025

Source: “Sustainable Urban infrasture, London Edition – a view to 2025”

CO2 emission reduction in Buildings is especially attractive


The most attractive and profitable leaverages to reduce CO2

Quelle: Studie „Kosten und Potenziale der Vermeidung von Treibhausgasemissionen in Deutschland“ von McKinsey & Company, Inc. im Auftrag von „BDI initiativ – Wirtschaft für Klimaschutz“ – AG Gebäude. Tertiären Sektor (Gewerbe, Handel, Dienstleistungen, öffentliche Gebäude, Gebäude in der Landwirtschaft)

Drives for pumps

Building sector: CO2 cost reduction – Germany 2020

Drives for AHU‘s

Efficient air handling systems

Adaptive Illumination

Energy monitoring Automatic control design


The business potential is substantial(average pay back time < 5 years)

World-wide energy efficiency potential200 billion $ US

billion $ US

Energy efficiency potential in commercial buildings in Germany: 18 billion $ US

18

130

52

200

USTotal GER RoW

Public sector43 %

Healthcare22 %

Offices12 %

Industries 7 %Hotels 4 % Retail 4 %Other 9 %


"The battle against climate change will be won or lost in our cities!"

…resulting in over USD 2 billion in energy savings and reduction of

1.5 Mt CO2 per year (energy mix adjusted)

World wide Building Automation has carried out 1.500 Energy Efficiency projects and monitoring 30.000 Buildings world wide…


Optimum adjustment of building performance to customer needs

No BACS

BACS without Energy

Monitoring

BACS with Energy

Monitoring

100%

90%

80%

70%

60%

Time

Ene

rgy

cons

umpt

ion

BACS withadditional

Energyefficiency measures

Energy consumption in buildingsHead office Building Automation, Zug

Reduced heating cost by 44% (50.000 $) p.a. without investment

Efficient usage requires continual optimization and monitoring


First EU Green Building Certificate(dedicated investment and minimum pay back time)

Siemens Real Estate location Munich-Perlach (GER)

Heating energy demand reduced by 34%; Electricity demand reduced by 15% Investment: $ US 246,000; annual savings: $ US 149,000 Payback period: less than two years


Energy performance contracting Examples: Karlstad and Berlin

150 public buildings

Energy performance contract

Financing provided by the customer

Contract value for the installation phase: $ US 12 Mio

176 public buildings

Guaranteed saving €1.4 Mio p.a. 18% less energy consumption 25% CO2 reduction

Long-term service contract for 12 years

Initial contract value: $ US 7 Mio

Holistic approach with financing and guaranteed savings

Commune Karlstad (SE) Berlin (GER)


Green Buildings are 0 - 5% more expensive to build, but more efficient to operate

Source: Deutsche Energie-Agentur GmbH (dena), GreenBuilding

General contractorsare not responsible for the energy consumption in the building

Architects focus normally on aesthetic and less on energy efficiency

Planer have little motivation to develop energy efficiency buildings

Investors Do not always have interest in energy efficiency buildings

GreenBuilding promotes energy efficiency in commercial buildings

Stake Holders


Existing buildings modernization and utility costs

Energiepass rates a building according to its overall energy efficiency level

Owner / Operator of commercial buildings simply pass the energy costs to the tenants

Tenants have little motivation to invest in the improvement of energy efficiency of the building

Ownersinvest, but the tenants benefit

Rental premiseswith lower utility costs cannot command a higher rental rate

Stake Holders


Smart Grid / Smart Buildings:flexible electrical energy consumption

Current utility tariff offers little motivation to save energy.

Many processes in the buildings are not based on actual demands.

Economic considerationsare not part of the HVAC control algorithms.

Source: * Gezetz zur Öffnung des Messwesens bei Strom und Gas für den Wettbewerb. 6 Juni 2008

Facts Role of Buildings in balancing the grid

Load shifting potential of buildings is 20% without dedicated storage

With dedicated storage over 30% of peak shifting is achievable

40% of overall energy consumption are consumed in buildings

Thus, building have a potential to reduce grid peak load by more >10%

Peak reduction potential strongly depends on climate zone

5% peak load reduction in the US could saves $ 3 billion per year


Summary and outlook

Today’s existing technology (Smart Grid / Smart Buildings) can solve the climate challenges to a large extent – innovative business models enable the fast implementation.

Climate challenges need joint efforts from Legislation – create market pull - and Industry – create technology push.

The main growth in population will happen in urban areas and cities where buildings represent the biggest lever to reduce the CO2 emissions – migration of the existing cities will be the main challenge.

Legislation and financial incentive systems as well as example setting


Thank you for your attention

Keynote, Andreas Shierenbeck

Technology

Transcript of Keynote, Andreas Shierenbeck